City council discusses budget, Water Street

Thursday’s meeting of the Ypsilanti City Council included its yearly budget report by City Manager Ralph Lange, Director of the Downtown Development Authority Tim Colbeck and Fire Chief Max Anthouard. Mayor Pro Tem Lois Richardson presided in Mayor Paul Schreiber’s absence.

In the 2013-2014 fiscal year, the city has a balance of approximately $1.3 million in general funds. The city receives $8.275 million in property tax revenue and $2.81 million in revenue sharing from the state. Despite this, the city is still running a deficit, although Lange insisted that the deficit was not as bad as it seemed.

Lange used fiscal year 2011-2012 as an example. In 2011-2012 the city projected a loss of $1.3 million dollars, but through reorganization and other methods it was reduced to a $736,000 loss. Lange said that the city will have a deficit, and willwould have to push forward to be sustainable in the long term.

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John Kaczor, a financial consultant with Municipal Analytics, was brought in to present a five-year projection of the city’s current trajectory. Like Lange, Kaczor pointed out that the general fund had to use its reserve funds to remain afloat in the long-term. Although, he said, the amount of money the city has saved is drying up.

The city had $8.5 million in 2013; it now has $7.2 million. According to Kaczor, by 2019 the city’s general fund will be reduced to $1 million.

Lange blamed the deficit the city is experiencing on a mixture of both declining revenue from property taxes and a state government that has been giving less and less money to cities statewide in revenue sharing. However, Lange admitted the real problem was the Water Street project.

The Water Street project was an investment made by the city right before the housing bubble burst. The plan was to purchase the land across the bridge from downtown and south of Michigan Avenue to expand the downtown area there. But with the decline in land values, the number of possible investors dwindled and the city has been stuck with land it cannot develop nor sell.

Lange also addressed city business. He was excited about the success in LED lighting, which he plans to spread throughout the city to light the streets with less power and less cost. The city also received the Staffing for Adequate Fire & Emergency Response Grant for new police and fire fighter hires. Both departments have been understaffed in recent years.

The SAFER Grant is a Federal Emergency Management Agency program to “provide funding directly to fire departments and volunteer firefighter interest organizations to help them increase or maintain the number of trained, ‘front line’ firefighters available in their communities,” according to FEMA’s website.

Lange proposed that the city could afford the new staff and investments by changing how pensions and retirees were paid in the city. Moving employees from the old Tier 1 program to a Tier 2 program, in which the city lowered retiree health care grants and which required all current employees pay 20 percent of health care premiums.

Also discussed in the meeting was the second reading of a motion to raise the minimum wage for workers and contractors for the City of Ypsilanti to $10.10 an hour. It passed unanimously.

Maintenance of the roads, and several sections of sidewalk, which were beaten up considerably over this past winter, wasere also brought up. Sam Kirton, head of public services, said that the bids were out and hoped the Ann Arbor Transit Authority might help.

Speed bumps, which have been proposed by the council earlier, he said would be installed, “Weather permitting.”